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New Market Study Published: Colombia Agribusiness Report Q2 2014

Boston, MA -- (SBWIRE) -- 04/11/2014 -- Colombia's agricultural sector will face a number of challenges in the medium term. Key export crops - such as coffee and cocoa - have underperformed in recent years owing to a lack of investment in infrastructure and outbreaks of disease. Although regeneration work is under way, it will take time to bear fruit. The strength of the Colombian peso against the US dollar is also posing challenges for the agribusiness sector, as the competitiveness of Colombia's exports is being eroded. Finally, there is still unrest among dairy, livestock and grain producers who fear that the entry into force of the Colombia-EU free trade agreement will further erode their profitability. The Ministry of Agriculture has taken steps to support these sectors to adapt to the arrival of inexpensive imports; however, ongoing efforts to improve infrastructure and modernise production techniques will be required.

- Sugar consumption growth to 2018: 6.7% to 2.1mn tonnes. This will mainly be driven by increases in the consumption of confectionery products as per capita incomes and young population rise. - - Poultry production growth to 2017/18: 10.2% to 1.26mn tonnes. The consolidation of the sector will accelerate in the coming years after poultry producers experienced difficult conditions over recent years, including soaring feed prices and sluggish demand. - - Coffee production growth to 2017/18: 13.9% to 11.3mn tonnes. Production will be aided by programmes to replace aging plantations and improve resistance to disease. However, we remain cautious about the long-term trajectory of Colombian coffee production, especially with prices currently low and given the strong Colombian peso. - - BMI universe agribusiness market value: US$14.0bn in 2014; down from US$14.2bn in 2013. Growth expected to average 4.2% annually between 2014 and 2018. - - 2014 real GDP growth: 4.5%; up from 4.3% in 2013. Forecast to average 4.6% from 2014 to 2018. - - 2014 consumer price index: 3.1%; up from 2.0% in 2013. Forecast to average 3.4% from 2014 to 2018. - - 2014 central bank policy rate (average): 3.75%; up from 3.25% in 2013. Forecast to average 4.55% from 2014 to 2018.

Key Revisions To Forecasts

- 2013/14 coffee production forecast revised up, to 10.5mn 60kg bags (compared with a previous forecast of 9.4mn bags), as favourable weather and the first harvest of new higher-yielding trees boosted output in the last six months of the season.

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